Placing grand-prize tickets in instant games is an elaborate process

A Tribune investigation found the Illinois Lottery collected hundreds of millions of dollars from selling tickets to the biggest-prize instant games in which it did not hand out all of the grand prizes in some of the games.

The private firms that manage and stock the Illinois Lottery with instant tickets say nobody knows where the winning tickets are.

There is no way to manipulate the games, they say, because a grand prize-winning ticket can show up anywhere, at any time.

While the firms don't know where the winning tickets are, the Tribune discovered the state and private firms sometimes know where they are not — part of an elaborate and opaque process to place the winning tickets into instant games.

For example, in one big-prize game, the lottery knew there were no grand prizes in the first 16.8 percent of tickets printed. In another, it knew there was no grand prize in the first 19.6 percent of printed tickets.

In each, the lottery ended those instant games before all grand prize-winning tickets were awarded.

Instant games are preplanned, with the exact number and type of winning and losing tickets figured out before the first ticket is ever sold. The odds of any individual ticket do not change, Northstar and its partner firms said.

Once that prize structure is designed, the instant ticket vendor — in Illinois' case, a company called Scientific Games — prints the tickets, and it follows specific rules on where those winning tickets should go.

Records show it's not completely random. A game will be split into batches, called pools. Each pool gets an equal number of tickets, including an equal number of smaller winning tickets.

Imagine a game has 100 pools and millions of small and medium-size prizes. Each pool would contain an equal number of the various prizes. Even within each pool, there isn't complete randomness. Those smaller winning tickets are inserted in specific patterns to ensure, among other things, that there's a stream of small and medium-sized wins and no long strings of losing tickets.

The grand prizes present another layer of complexity because a few grand prizes can't be divided to equally fit into 100 pools.

States and their vendors are generally leery of explaining how they insert grand prizes in games, fearing that players will learn how to game the system.

But from interviews with industry experts and a review of assorted lottery documents from other states, the Tribune identified two common methods. States can take the number of grand prizes, divide the total number of tickets by that number, and create what are, in essence, super pools. Within each super pool, randomly inserted somewhere, is a grand prize. The concept is called stratified random distribution.

In a game with three grand prizes and 30 million tickets printed, for example, a computer program would randomly insert one grand prize somewhere in the first 10 million tickets, the second 10 million tickets and the third 10 million tickets.

Another method is called overseeding. A computer program overprints the number of big-prize winners, inserting them randomly into the game, and then through a complicated algorithm decides which tickets to pull back and destroy to ensure the remaining grand prize tickets are as evenly distributed as possible.

Scientific Games — the firm that prints Illinois tickets — is a co-owner, along with another vendor, of Northstar Lottery Group, the private firm that manages the Illinois Lottery. It won't detail what method it uses, other than to say it uses a standard industry method.

"We have highly sophisticated systems and algorithms that ensure the secure and even distribution of high level and top prizes throughout the game. The primary purpose of this standard is to ensure that no person knows or is able to identify the location of any high level or top prize," Scientific Games said in a written statement.

Illinois Lottery officials initially said they believed their vendors used overseeding but then later said they expect grand prizes are distributed according to stratified random distribution.

In Illinois, at least for the big-prize games studied by the Tribune, Scientific Games didn't always deliver all the tickets at once. Instead, it at times printed and delivered tickets in smaller batches.

Those batches came with their own prize structure sheets that described, for just that batch, the exact number of winners included at each prize level, including grand prizes.

The Tribune obtained seven such sheets from the Illinois Lottery through an open records request. Five of those sheets included at least one grand prize.

In a follow-up request, the Tribune asked the lottery to contact its vendors to obtain any other partial prize sheets that may have been created for other games. Lottery spokesman Jason Schaumburg said the lottery was "confident" it had produced everything and "did not need to ask our vendors."

Other states told the Tribune they sometimes get partial prize structure sheets. In Georgia, one game had a sheet that showed no grand prizes in its first 9 percent of tickets printed. Georgia's lottery said it felt the game was fairly run, and it provided data showing it sold nearly all of its tickets before it was ended.

One of the Illinois prize sheets was for a game called The Good Life: $5,000 A Week For 20 Years. There were three grand prizes designed into the game.

Northstar ordered 23.8 million tickets, and Scientific Games delivered a first batch of slightly more than 4 million tickets, or just less than 17 percent of the tickets ordered. The accompanying prize sheet for that batch noted the batch did not contain a grand prize.

The firms and the lottery acknowledged that tickets are typically distributed sequentially to stores. If so, according to the sheet, there was no chance anyone who bought one of the first 4 million tickets for the game would win a grand prize.

The lottery eventually sold into another batch of tickets printed for that game, and those additional tickets did include a grand prize winner. In the end, the lottery sold 37 percent of the game's tickets and awarded one of the game's three grand prizes.

Northstar and Scientific Games said the timing of ending games was unrelated to the number of grand prizes awarded. They said they relied on other factors such as declining sales.

In the separate game The Good Life: $10,000 A Week For 20 Years, the lottery and firms knew that there was no grand prize in the first batch of nearly 3.9 million of 19.8 million tickets printed.

Records indicated there was no grand prize in the first 19.6 percent of tickets sold.

The game did sell through that batch and into another, but only slightly. The game was ended after selling 22.4 percent of its tickets. It did not award any of its three grand prizes.